As your business starts to give a steady income stream, you have to make a choice. One choice is instant gratification by sucking away your profits from the business. Second is to postpone rewarding yourself with the intent of making big gains, by reinvesting profits into your business. What you choose determines how big your business can be.
Whenever we speak of a primary qualification of an entrepreneur, it is always said that the entrepreneurs must be risk takers. While this is somewhat true; is not entirely true. Let me explain this – when a person chooses not to work for a salary, he takes a professional risk with his income stream. He trades the comfort of a regular salary and embraces the risk of exchanging his idea of a product or service for a larger and growing revenue steam, in the near future. At the beginning of his entrepreneurial effort, there is risk until the start of his revenue stream. Thereafter, he seeks a steady revenue stream. Following achievement of a regular and steady income; how he thinks determines, how big he can be. He can look for growing his revenue stream or look for the comfort of a steady income.
Having gone through a phase of severe paucity of personal income, a steady flow of revenue comes as a whiff of bliss; he suddenly has at his disposable income that he can use for his personal and family welfare. The more he focuses on this, the less will he want to take any risk that will disturb his steady stream of disposable income. He develops an aversion to invest in his business and therefore, fails to grow. Instead, he seeks to keep up the steady revenue stream, whilst saving costs. By doing all work himself he gets bog down. Chasing business growth needs monetary investment. The “what if” doubt is about ROI on additional investment and the necessity of sacrificing profit in the short run, to chase a prospective revenue growth.
A large number of businesses fail to make it big, because business owners see a gradual decline in their risk taking ability as their businesses start to grow. At this inflection point, business owner must make an important value decision of going for growth and glory versus settling in for mediocrity and having a stable and steady income for himself. That is to say, if he chooses the latter, he could become a self-employed businessman.
In the blog that follows, read to understand the concepts of “risk” and “probability” and how you can work yourself out of your comfort zone and grow your business into a big one.
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Having the right systems – standardizing for performance.
Staffing - Critical success factor to keep growing.
Staffing - Critical success factor to keep growing.
Hi Parshu, I finally got to reading your blog. I like what you have written and it is most certainly true. Its all about balancing your longg term risk taking ability with short term personal goals. It would be interesting to discuss strategies to make a business independent of your personal goals and how to align them better. Often, in a family business scenario it becomes rather difficult.
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